Policy Responses to COVID-19 - Climate Finance and Carbon Markets

Abstract

This chapter explores the potential role of using climate finance and carbon markets to meet the targets of the United Nations (UN) regional agenda on climate change in the Asia-Pacific. This agenda includes obligations under the Kyoto Protocol and the Paris Agreement to reduce greenhouse gas emissions and limit global warming. Climate finance refers to local, national or transnational financing that seeks to support mitigation and adaptation actions to address climate change (UNFCCC 2020a). Carbon markets represent a market-based strategy, whereby a price is placed on greenhouse gas emissions allowing companies and governments to purchase carbon credits or offsets to meet greenhouse gas emissions reduction targets. The proposal to employ climate finance and carbon markets is informed by growing economic and environmental challenges in the region that have been further exacerbated by COVID-19. This chapter analyses carbon markets case studies across industry and the public sector in the region. This chapter identifies the opportunity to build climate finance infrastructure post-COVID-19 and makes policy recommendations for governments and corporations.